INDEPENDENT MEDIA | Is the BRICS Bank an Alternative for Greece? by Konstantinos Myrodias and Panos Chatzinikolaou

Over the past few weeks speculations have been
circulating over Greece’s potential accession to the New Development Bank
established by the BRICS-Brazil, Russia, India, China and South Africa.
Russia’s invitation to Greece to become a member of the BRICS bank comes in a
delicate point for the latter, since its new leftist SYRIZA-led government is
attempting to strike a deal with its European counterparts in order to avoid a
potential bankruptcy that would have tremendous impact on the country and the
Eurozone as a whole. Is Russia’s invitation to Greece just a mere coincidence?
Have the BRICS decided to save Greece from collapsing, enhancing Eurozone’s
sustainability? At a time like this, where West- Russia relations bring back
Cold War memories, such an explanation seems to be a truly superficial one.

In today’s international stage, it’s more than
clear that the BRICS have established the New Development Bank to challenge the
Western dominance in the global economy. The United States, in the aftermaths
of its Second World War’s victory has created an economic, political, and
ideological hegemony on a global level. International Financial institutions
such as the International Monetary Fund and the World Bank became the symbols
of US global economic and political hegemony. This seemed to be
unchallengeable, especially after the demise of the Soviet Union, when the
global economy was growing and standards of living in most western countries
were steadily rising. However, developments in the World economy during the
last decade and the emergence of other economic powers such as BRICS, along
with the global economic recession of 2008, which hit Europe particularly hard,
have created a new global economic environment; an environment that has left
Western economic hegemony more vulnerable than ever before. The question that
arises, therefore, is clear and simple; who is going to fill the void?

Based on their economic dynamic and developing
economies, the BRICS are trying to challenge the international economic and
political status quo and through the establishment of their own Bank to
increase their role in the global financial and political scene. China’s,
Russia’s, India’s, Brazil’s and South Africa’s decision to provide higher funds
to the New Development Bank than the IMF and World Bank, highlights the BRICS’s
determination to hit the International Financial establishment in a time when
it is especially vulnerable.

In this period of global antagonism, the BRICS
are aiming to take advantage of the West’s political deficiencies. Greece has
been for years the main concern in the ‘Western’ economic camp and Eurozone’s
weak link. The IMF, ECB and European Commission have not yet reached an
agreement with the new Greek government, which aims to end the continuous
economic and social deprivation of the country.

This generates an unprecedented opportunity
for the BRICS and of course Russia to break the Western monopoly to the
management of global economic affairs. Russia’s involvement in the heart of the
‘Western camp’- the Eurozone – to save one of its members, should be considered
as an attempt to play a more active role in the World economy and to get
involved in European Union’s internal affairs. Russia by luring Greece through
economic assistance aims to take advantage of the ‘Western Camp’s’ fragility,
and, by following the example that the USA has set for many decades, aims to
use this economic assistance as a means of political influence. The BRICS’
invitation to Greece is Putin’s next move in the chessboard between Russia and
the West.

This might be the start point of a new battle
between the West and Russia in political, economic, but mostly in ideological
terms.

Is BRICS Bank an alternative for Greece? The
new Greek government, in a desperate economic and political situation, interprets
this invitation as an alternative source of economic assistance to avoid
bankruptcy or at least as leverage to maximize its chances for a gainful deal
in the bargain with the EU and the IMF.

However, the New Development Bank has been
established solely to fund projects within a country, such as the creation of
new highways or hospitals, but, as the heads of the five states that compromise
the Bank have stated, certainly not to fund a country to the extent that it
avoids bankruptcy.

Not only is BRICS’ bank not an alternative for
the country as it cannot provide that economic assistance that Greece needs to
survive, but also the latter seems too weak in economic and political terms to
manipulate West- Russia antagonism for its own benefit. Such a strategy is
perilous and its results are highly unpredictable.

Except these risks, Greece should consider the
big picture; How much different is a ‘Western’ mechanism of financial support
than a BRICS’ or a Russian one? Are there any differences in being at the mercy
of EU and IMF than being a pawn of Russia and the BRICS in the global
chessboard? This is a vicious dilemma.

Greece should think twice before getting
involved in a very dangerous game, with everything to lose and nothing to gain.

About The Author:

Konstantinos Myrodias is a PhD candidate in
International Development at the London School of Economics, and Onassis
Foundation Scholar.

Panos Chatzinikolaou has a MSc in Public
Policy at the London School of Economics and is currently an intern at the
United Nations Headquarters in New York.